Supreme Court rules on Employment Tribunal fees

The Supreme Court has this morning delivered its judgement in the case of R (on the application of UNISON) v Lord Chancellor, in which trade union UNISON challenged the introduction of fees to bring claims in the Employment Tribunal by the Government. In a landmark decision, the Supreme Court has upheld UNISON's challenge and quashed the fees order introduced by the Employment Tribunal.

From 29 July 2013, claimants bringing claims in the Employment Tribunal, and appealing to the Employment Appeal Tribunal, have been required to pay fees, ranging from £390 to £1600. Following the introduction of fees, official statistics show a dramatic reduction in claims brought, by around 80%. Unison's challenge to the introduction of fees had previously been unsuccessful in two sets of proceedings in the High Court, and on appeal in the Court of Appeal.

Unison appealed to the Supreme Court on two grounds:

Whether the introduction of fees breached the fundamental principle of EU law, that legal rights must have an effective remedy, and that the fees make it impossible in practice or excessively difficult for claimants to enforce their rights; and

Whether the fees are indirectly discriminatory against claimant's with particular protected characteristics under the Equality Act 2010.

The Supreme Court has upheld both grounds.

In reaching its conclusion, the Court commented that access to the courts is a vital component of rule of law. It noted that fees have resulted in such a substantial and sustained drop in the number of claims brought in the Employment Tribunals and that there is evidence from a number of sources that fees have had an impact. For example, in answers to surveys to ACAS, potential claimants have given as the reason that they decided not to bring a claim that they cannot afford the fees. In addition, many claims brought in the Tribunal are low value and the fees are disproportionate, rendering it futile to bring the claim given level of fees in comparison to the potential value of claim.

The Court also found that the Fees are indirectly discriminatory. Using the example of sex discrimination, the Court found that a higher proportion of women bring type B claims which attract a higher fee and that this causes a disproportionate impact on women. The Court found that the higher fees are not objectively justified by the Government's aims in introducing fees which included deterring unmeritorious claim and transferring some of the cost of running tribunals from the public purse to claimants. The Court found that it had not been shown that higher fees were any more effective than lower fees at achieving these aims.

The Lord Chancellor undertaken to reimburse fees already paid by Claimants. It is likely, that Respondents who have been ordered to pay successful Claimants' fees will also have to be reimbursed in some way.

Emma Burrows, Head of the Employment Department at Trowers & Hamlins LLP said:

"Today the Supreme Court has reversed a major change in how employment rights are handled in England and Wales. This will impact significantly on employers and the judicial system. The Employment Tribunals are already under strain following a reduction in judicial resources, with long claims being listed well into 2018 in some regions. As claims go back up, this will need to be addressed by the Government. Employers will also need to reassess their approach to risk when facing potential disputes with employees.

In the immediate future, the reimbursement of fees already paid by Claimants and reimbursed by Respondents will be a significant administrative burden for the Government. As yet, there is no process for parties to follow to claim these fees back."